Municipals firm on long end; San Francisco Public Utilities brings $375 million revenue bonds

By Sheri Kasprzak

New York, Sept. 1 - Municipals saw some firming on the long end of the yield curve, said a market source, while the remainder of the market stayed mostly unchanged.

"There is some firmness out there, if you go out to the long end," said the trader, who was reached Tuesday afternoon.

"Trading is pretty light, but some things are out there. It's about what we expected."

In the primary market, the San Francisco Public Utilities Commission priced the largest offering of the week: $375 million in series 2009B San Francisco water revenue bonds.

"It probably helps us a bit that primary is kind of cooling off," the trader said.

"I'm sure as the week progresses, we might gain some ground [in secondary]."

The remainder of the week's primary action looks light.

The San Francisco bonds (A1/AA-/) were sold competitively with J.P. Morgan Securities Inc. winning the bid with a 4.54% true interest cost, said a sellside source close the deal.

The bonds are due 2011 to 2032 with a term bond due 2039. Coupons ranged from 4% to 5%, but the bonds were not formally reoffered.

Proceeds will be used to fund the construction, acquisition, equipment and design of various capital projects in the commission's water system improvement program.

Waterbury sells $313.15 million

Also on Tuesday, the City of Waterbury, Conn., sold $313.145 million in series 2009 taxable general obligation bonds, said a pricing sheet.

The bonds were sold through lead manager William Blair & Co.

The bonds are due 2010 to 2016 with a term bond due 2038. The serial coupons range from 2.707% to 4.88%, all priced at par. The 2038 bonds have a 7.089% coupon, also priced at par.

Proceeds will be used to make a deposit to the city's pension plan.

Fort Worth brings $140.8 million

In other primary action, the City of Fort Worth, Texas, priced $140.8 million in series 2009 general purpose bonds and certificates of obligation, said a pricing sheet.

The sale included $85.2 million in series 2009 general purpose bonds and $55.6 million in series 2009 COPs (Aa2/AA+/AA).

Both were sold competitively. JPMorgan took the general purpose bonds with a 3.73% TIC, and RBC Capital Markets Inc. won the COPs with a 3.48% TIC.

The general purpose bonds are due 2010 to 2029 and were not reoffered. The COPs are due 2010 to 2029 with coupons from 4.375% to 5% and yields from 0.55% to 3%.

Proceeds will be used to construct street and sewer improvements, park and recreation improvements and drainage improvements as well as acquire traffic equipment.

Hawaii says aloha to bonds

Elsewhere, the Hawaii Department of Budget and Finance priced $83.195 million in series 2009 special purpose senior living revenue bonds on Tuesday, said a pricing sheet.

The bonds were sold through senior manager Ziegler Capital Markets Inc.

The sale included $44.57 million in series 2009A bonds, $5.9 million in series 2009B bonds, $17.775 million in series 2009C-1 bonds and $14.95 million in series 2009C-2 bonds.

The 2009A bonds are due 2029 and 2044 with 8.75% and 9% coupons, respectively, both priced at par. The 2009B bonds are due 2044 with a 7.75% coupon, priced at par. The 2009C-1 bonds are due 2015 with a 7.5% coupon, priced at par, and the 2009C-2 bonds are due 2014 with a 6.4% coupon, also priced at par.

Proceeds will be used to fund the construction, acquisition and equipment of a 198,207-square-foot senior living facility.

Honolulu sale planned

Also out of the Aloha State is a $276.985 million sale of series 2009 wastewater system revenue bonds from the City and County of Honolulu, said preliminary official statements. Pricing is expected during the week of Sept. 14.

The deal includes $148.855 million in series 2009A-C first bond resolution bonds and $128.13 million in series 2009A second bond resolution bonds.

The first bond resolution bonds include $67.55 million in series 2009A senior bonds, $51.875 million in series 2009B Build America Bonds and $29.43 million in series 2009C recovery zone economic development bonds. The second bond resolution bonds include $128.13 million in series 2009A wastewater system revenue bonds.

The first bond resolution bonds (Aa3/AA-/AA-) will be sold on a negotiated basis with Merrill Lynch & Co. Inc. and Piper Jaffray & Co. as the senior managers. The 2009A bonds are due 2010 to 2028, and the 2009B bonds are due 2029 and 2035. The 2009C bonds are due 2039.

The second resolution bonds (A1/A+/A+) will also be sold through Merrill Lynch and Piper Jaffray. The bonds are due 2010 to 2023.

Proceeds will be used to fund improvements to the wastewater system throughout the city and county.

Ohio Building sale coming

Looking to Wednesday's upcoming sales, the State of Ohio plans to bring $170.32 million in state facilities refunding bonds for the Ohio Building Authority.

RBC Capital Markets is the senior manager for the bonds (Aa3/AA/AA-).

Also coming up Wednesday, Pasco County in Florida plans to bring $141.67 million in series 2009 water and sewer revenue bonds through Merrill Lynch and Morgan Keegan & Co. Inc. The county seat is Dade City, Fla.

Nassau County in New York will bring to market $110 million in series 2009 general obligation bonds on a competitive basis. The county seat is Mineola, N.Y.

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